additional bonds test

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Additional bonds test

A test for ensuring that bond issuers can meet the debt service requirements of issuing any new additional bonds.

Additional Bonds Test

A financial statement that a company must issue before making a new issue of a bond. The additional bonds test shows what assets the potential issuer has available to pay coupons on the bond. It helps ensure the issuer is able to service debt on the new issue. The additional bonds test increases the transparency of the market and helps one accurately gauge the risk of the new bond issue.

additional bonds test

A financial standard that must be met before issuing bonds that use as security revenues or assets already pledged for outstanding bonds.
References in periodicals archive ?
Interest earnings on various funds provide the cushion to absorb revenue volatility and meet the additional bonds tests, the key legal protection to bondholders.
The senior lien additional bonds test requires a minimum of 1.
Senior lien bonds are rated 'AA' with a strong 3x additional bonds tests.
Legal protections are satisfactory for both series, based on the additional bonds tests of 1.
Additional bonds tests require net revenues to cover maximum debt service of proposed and outstanding bonds 1.
2x debt service coverage, consistent with current bond bank practice, although additional bonds tests allow leveraging down to the 1.
Legal provisions that include additional bonds tests of 5.
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